Taoiseach Enda Kenny has been accused of ceding more economic sovereignty at last week's European summit deal.

Sinn Fein president Gerry Adams said the so-called fiscal compact agreed by every country in the European Union (EU), except Britain, includes a "golden rule on austerity". The commitment to a 0.5% deficit ceiling would be enshrined at constitutional or its equivalent level in the Irish legal system under the agreement, he claimed.

"There's a huge contradiction between your assertion about restoring our economic sovereignty, and then at the same time signing up to giving away more of our economic sovereignty in this fiscal compact," Mr Adams claimed in the Dail.

This year's deficit is expected to be just over 10% of the value of the economy and Ireland is already bound to cut that to 3% within three years under the terms of the EU/IMF (International Monetary Fund) bailout.

The Sinn Fein leader asked if the commitment to go even further would go into the constitution, if a referendum would be held and how many more years of austerity would be needed to bring the deficit down to 0.5%.

But Mr Kenny said the political agreement in Brussels still had no legal standing and there was a great deal of technical work and analysis to go into it before it would be ratified. He added: "It's in everybody's interests that there be fiscal discipline and there be fiscal control by countries in the way that they draft their budgets.

"But don't get the impression that we have a philosophy here of having a generation of austerity before us, because if we don't fix the engine of our economy then we are not going to have a country."

Fianna Fail leader Micheal Martin said he "can't get over" social welfare cuts in the Budget. He claimed changes in the way people are means-tested meant low-income families in receipt of carers' allowance are having their family income supplement slashed.

One such family, who had four children under 11 and only one parent at work, had their income supplement cut by 139 euro, Mr Martin told the Dail. He added: "That represents a savage cut for a family of six on one income. I can't get over that any Budget would impose that size of an income reduction to families on very low incomes," he said.

Mr Kenny claimed all the Budget cuts had to be made and that Fianna Fail's calls to reverse them were not possible or credible. "The choices here are never easy and they are all unpalatable," he said.